Financial Analyst Interview Prep Questions And 100%
Correct Solutions
EBITDA - ANSWER Earnings before Interest, Taxes, Depreciation, and Amortization
2 types of forecasting approaches - ANSWER Quantitative and Qualitative
Quantitative approach to forecasting - ANSWER historical data from time series or
correlation information
Qualitative approach to forecasting - ANSWER opinions from experts, decision-makers,
or customers
4 methods of quantitative forecasting - ANSWER 1. Naive
2. Moving averages
3. Exponential smoothing
4. Trend Projection
4 methods of qualitative forecasting - ANSWER 1. Executive opinion
2. Delphi method
3. Sales force estimates
4. Consumer surveys
Linear Regression - ANSWER
What can you bring to the table? - ANSWER Most companies think long-term, hoping to
hire a financial analyst who will be there for years to come and grow with the company.
,A question like "What can you bring to the table?" sounds like quite a simple and direct
question concerning your specific skills. It also gives an opportunity to highlight your
dedication to the profession.
Share your long-term goals, especially those that could be aligned with what you must
have gathered from the company research. Describe your personal qualities, such as
persistence and loyalty, but emphasize those qualities relevant to the financial analyst.
Make sure to provide specific examples to demonstrate each of these qualities.
What other firms are you talking to? - ANSWER "What other firms are you talking to?" is
the best interview question. Answer truthfully but generally — avoid naming names. Be
sure to make it clear why the financial analyst job you're interviewing for is the one you
want, and back that claim up with some evidence.
What is the best story you read in the Wall Street Journal this week? - ANSWER
Managers looking to make sure you fit in will often make company culture the focus of
their hiring. In part, this is achieved with the question that seems innocuous enough, but
is often an agenda-driven one:. For example, one of the ways to know if you actually eat,
drink, and sleep finance is by asking, "What's the best story you read this week in The
Wall Street Journal?" If someone asks you this type of question, stay away from
front-page headlines. Choose something more related to your industry or even to the
daily activities financial analysts go through, and you will make a lasting impression.
Get ready for the tough ones - ANSWER There are the predicable interview questions,
and then there are those tricky ones that can stump even the most seasoned financial
analyst. Take some time to familiarize yourself with in-demand financial analyst skills
and practice answering the following:
1. What techniques do you utilize to develop financial analysis reports?
2. How do you generate routine - monthly, quarterly, annually - sales reports?
3. In your opinion, what is the best profitability model to forecast projects?
, 4. What sort of methodologies do you utilize during financial analysis?
5. What licenses, credentials, and certifications do you have? How do you think they
help you in your professional context?
6. How would you normally develop collaborative work relations?
Some interview questions are those specifically aimed at testing very particular
knowledge, like the following:
1. Which is more important to a corporation: increasing price by 1 percent, or
increasing customer base by 1 percent?
2. In your view, what is the best single metric to use to evaluate a company's stock?
3. If you invested $100 today and received a 10 percent return in year 1, and then in year
2 you lost 10 percent, how much do you have at the end of year 2?
Linear Regression - ANSWER Linear regression is the most basic and common type of
predictive analytics. Overall, the concept of a regression is to test two things:
(1) does a set of predictor variables do a good job in predicting an outcome (dependent)
variable?
(2) Which of the variables are 'significant' predictors of the outcome variable, and in
which direction do they - based on the size and direction of the beta estimates-affect the
outcome variable?
These regression estimates are used to explain the relationship between one dependent
variable and one or more independent variables. The simplest form of the regression
equation with one dependent and one independent variable is defined by the formula y =
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